Monday, March 18, 2013

Being thrown off a bridge disturbs the person being thrown;
and whichever view they take of it they are just as dead when they hit the
bottom!

Epictetus is right in one way; people aren’t really
disturbed by things, what disturbs them is how those things affect their lives.
It’s the impact on their lives and not the view they take of it that upsets
them. The impact either enhances or disrupts their plans and their progress
toward their goals. If it enhances their plans they are happy if it disrupts
those plans they are disturbed.

If you are caught in a traffic jam, you are not disturbed by
the traffic jam, but by it’s delay of your trip. The traffic jam may make you be late to a job interview, or cause your trip to the grocery store to take
twice as long. Its not your view of the traffic jam that disturbs you it’s the
delay that the time spent sitting in traffic causes that upsets you.

The point of people who quote ideas such as Epictetus’ is to
help you calm down and accept things as they are, but how does accepting things
help?

The guy who invented the wheelbarrow was disturbed by the
amount of effort to carry small loads of whatever. If he had adopted the
concept that the level of effort was not the problem but how he viewed it, we would
still be carrying just a few bricks at a time instead of a wheelbarrow load.

Epictetus’ real message is to ensure that we are
focused on the right part of the issue. Not on the traffic jam, but on the
disruption in our life. Then and only then can you correctly identify what is
wrong and being to fix the real problem!

Friday, March 8, 2013

In The Lords of Strategy, Walter Kiechel writes “ the
transcendent purpose of strategy became clear, at least to Wall Street: its aim
was to enrich shareholders boost the stock price.”

The fallacy of this view is obvious; stock prices are a
by-product of a well-managed company, not a goal in and of itself. As no less
than Warren Buffet points out: “If a business does well,
the stock eventually follows”.

The concept of the three Cs central to Strategic Management
are Cost, Competitors and Customers. While I admit that the three Cs are
important, nowhere in the book’s description of strategic management did I see
any focus on the Product. As Robert Lutz found when he went to GM, management
was so focused on their “strategic” numbers that they lost sight of the
product, to the ultimate detriment of the corporation.

I submit that this is the major problem with American
business today, most are so focused on target numbers they have lost sight of
their product.

Whenever you begin making design or quality decisions based
on how much profit you can make if you do it differently than the designer
originally wanted, you’ve “said our profit level is more important than what we
deliver to the customer”.

In the book Wheels, Arthur Hailey described a conversation
at the automobile company his character worked for where they were discussing
the need to add a $5 brace to remove a vibration in their latest car. Their big
concern was that it would cost them three million dollars, not the quality of
what they would deliver to the customer. $3,000,000 is a lot of money but it
was not the difference between profit and loss, but a difference in how much
profit.

While the book didn’t discuss how the frame came to be
poorly designed enough to allow that vibration, my personal experience would
lead me to look at the frame design process. I would look for the same cost-over-quality
decision when the frame was being finalized. A mind set of “if we can save
$1.00 on the cost of the frame we will get credit for the additional $600,000
more profit. That shortsighted focus on short-term profits ended up costing
$4.00 more in the long run.